American personal styling service company Stitch Fix has delivered a stronger-than-expected start in the first quarter (Q1) of fiscal 2026 (FY26), with revenue rising 7.3 per cent year-on-year (YoY) to $342.1 million, driven by higher spend per client and improved assortment performance.

Gross profit rose to $149.3 million but gross margin slipped to 43.6 per cent, down 180 basis points, due to higher product costs and promotional activity. Adjusted EBITDA increased to $13.4 million, reflecting a margin of 3.9 per cent compared with break-even levels seen in earlier turnaround phases.

Stitch Fix has reported a strong Q1 FY26, with revenue up 7.3 per cent to $342.1 million and improved adjusted EBITDA of $13.4 million.
While active clients declined, spending per client increased.
The company posted a $6.4 million net loss but ended debt-free with positive free cash flow.
With rising engagement and an AI-driven strategy, Stitch Fix expects continued growth through FY26.

The company reported a net loss of $6.4 million, nearly unchanged from the $6.26 million loss in the same quarter a year earlier, though operating performance improved on an adjusted basis.

Active clients fell 5.2 per cent YoY to 2.307 million, though revenue per active client improved 5.3 per cent to $559, signalling higher engagement among retained users. Inventory levels increased sharply to $141.5 million from $118.4 million last quarter, aligning with assortment expansion and seasonal buying, Stitch Fix said in a press release.

The company closed the quarter with a strengthened balance sheet, holding $244.2 million in cash, cash equivalents and investments and remaining debt-free. Operating activities generated $10.9 million in cash, and free cash flow turned positive at $5.6 million, marking a key milestone in the restructuring roadmap.

Looking ahead, Stitch Fix forecasts continued growth in the second quarter, projecting revenue between $335 million and $340 million—equating to 7.3-8.9 per cent annual growth. Adjusted EBITDA is expected to range from $10 million to $13 million with a margin of up to 3.8 per cent.

For full FY26, the company expects revenue between $1.32 billion and $1.35 billion, representing 4.2-6.5 per cent YoY growth. Adjusted EBITDA guidance stands at $38-$48 million with a 2.9-3.6 per cent margin. The company anticipates a full-year gross margin between 43 and 44 per cent, advertising expenses representing 9-10 per cent of revenue, and positive free cash flow.

As part of its operational reset, Stitch Fix continues to reflect its discontinued UK business separately, following its exit in fiscal 2024. The company noted that non-GAAP measure reconciliations are unavailable due to uncertainty around restructuring, taxes and other one-time cost fluctuations but cautioned these factors could materially impact GAAP outcomes.

With stabilising financials, rising revenue per client, and accelerating execution of its AI-led retail model, Stitch Fix signalled confidence in sustaining momentum as it moves deeper into fiscal 2026.

“Q1 was a strong start to the fiscal year—we accelerated year-over-year revenue growth to 7.3% and captured considerable market share gains,” said Matt Baer, CEO, Stitch Fix. “As a result of the successful execution of our transformation strategy, we are increasingly becoming the retailer of choice for more of our clients’ apparel and accessories needs. We are doing this by leveraging the latest in GenAI technology, the expertise of our human Stylists, and our assortment of leading brands to deliver the most client-centric and personalised shopping experience.”

Fibre2Fashion News Desk (SG)

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USPA Global is pleased to announce the acquisition of Aydinli Hazir Giyim San. Tic. A.S. (Aydinli Group) by HRK Holding A.S. (Saat & Saat). Both entities are licensing partners of U.S. Polo Assn., which is USPA Global’s multi-billion-dollar sports brand and the official brand of the United States Polo Association (USPA). As one of the brand’s largest partners, the acquisition of Aydinli provides access to more than 50 countries across Turkey, the Middle East, Eastern Europe, and North Africa.

USPA Global has announced HRK Holding’s (Saat & Saat) acquisition of Aydinli Group, both key US Polo Assn partners.
The deal expands Saat & Saat into global apparel, giving access to 50+ countries.
With 450+ stores, the brand targets $1bn regional sales, strengthening growth across Turkiye, the Middle East, Eastern Europe and North Africa.

With this acquisition of Aydinli, Saat & Saat is expanding the company’s regional portfolio alongside its very successful watch business by entering the global apparel industry. With more than nearly 450 U.S. Polo Assn. stores and multiple branded digital sites, U.S. Polo Assn. will continue its record growth. Aydinli is currently one of the leading retail powerhouses in the region, with significant growth potential and a well-established sales network spanning monobrand stores, department stores, and e-commerce channels.

“We would like to congratulate Ramazan Kaya, as Founder and CEO of Saat & Saat, on the recent acquisition of Aydinli,” stated J. Michael Prince, President and CEO of USPA Global, who globally manages the U.S. Polo Assn. brand worldwide. “As a long-time partner of U.S. Polo Assn., we believe this strategic transition will provide our global sports brand the opportunity to elevate and expand our business, targeting $1 billion in retail sales across the region in the coming years.”

“I would also like to personally thank Mr. Seref Safa, Past Chairman of Aydinli, for his leadership and TMSF for their support over the years. Together, we built a strong foundation that will lead to a bright future,” Prince added.

Following the successful closing process, Ramazan Kaya, CEO of Saat & Saat, will serve as CEO of Aydinli Group.

“We’re proud to take this important step in our long-standing partnership with U.S. Polo Assn., expanding and strengthening our presence in one of the most dynamic retail markets in the world,” said Kaya. “This acquisition allows us to accelerate growth, enhance our capabilities, and position both our company and the brand for a powerful next phase in Turkey, the Middle East, Eastern Europe, and North Africa.”

“This milestone reflects our shared vision with U.S. Polo Assn. — to elevate an iconic global brand while continuing to innovate and inspire through the lifestyle it represents. The Team at Saat & Saat is energized by the opportunity to shape the future together,” Kaya added.

The partnership with Aydinli and U.S. Polo Assn. began in 1997, with accelerated growth across the region for nearly 30 years. Among the partnerships, many successes in Istanbul’s flagship Istinye Park U.S. Polo Assn. store, completed by Aydinli in 2024. Further, U.S. Polo Assn. has launched nearly a dozen brand-specific websites in the region to enhance digital offerings for customers further and provide easier access to its product offerings, with early results exceeding expectations, reinforcing the authentic connection between the sport and the brand.

As one of Turkey and the Middle East’s leading casualwear power brands, U.S. Polo Assn. has a retail footprint of more than 1,500 points of sale across more than 50 countries in Turkey, the Middle East, Eastern Europe, and North Africa. With Turkey and the Middle East being one of the global, multi-billion-dollar sports brand’s largest markets, the expectation is that U.S. Polo Assn. will be a billion-dollar brand in this region in the coming years. Globally, the U.S. Polo Assn. brand is in 190 countries and has global retail sales of more than $2.5 billion.

Note: The headline, insights, and image of this press release may have been refined by the Fibre2Fashion staff; the rest of the content remains unchanged.

Fibre2Fashion News Desk (HU)